Russia Waits As Ukraine Baulks At Terms Of EU Deal

KIEV, Ukraine -- With Ukraine’s continuing failure to release former prime minister Yulia Tymoshenko from jail comes a growing impression that president Viktor Yanukovich and his allies have decided it is better to deal with the devil you know – preferring to rebuild strained ties with old ally Russia rather than enter into historic agreements with the European Union. Parliament in Kiev was deadlocked again yesterday over what to do about Ms Tymoshenko, whom the EU sees as the victim of political persecution by courts loyal to Mr Yanukovich. If she is not freed before a major EU summit in Lithuania on November 28th, Ukraine will not be offered landmark political and trade deals that would weaken Moscow’s centuries-old grip on the country and align its future with the West. Feared rival Yanukovych, her most popular rival, who has vowed to topple him and investigate the allegedly ill-gotten gains of his supporters and his own family. He may see it as too risky to release her ahead of a presidential election in 2015. But if he is to abandon – or pause on – Ukraine’s European path, Yanukovich must quickly repair relations with Moscow, which have been damaged by his flirtation with Brussels. From President Vladimir Putin down, Russian officials have made it clear that if Ukraine signs the deals with the EU this month, nothing will ever be the same between them again. “That’s why we warn in advance, we say: listen, we understand everything. This is your choice, do it. But keep in mind that we would have to somehow protect our market, to introduce protective mechanisms,” Mr Putin said recently. Sergei Glazyev, Putin’s economic adviser, was more blunt: “We have no idea why Ukraine is signing this agreement . . . It will cut the roots of our economic co-operation.” On another occasion, he predicted that Ukraine’s loss of business with its main trading partner would be disastrous for the country. “Who’ll pay for Ukraine’s default, which will be inevitable?” he asked. In the last few months, Russia temporarily imposed new checks on its border with Ukraine, causing huge delays for road traffic, and banned the import of chocolate from the Roshen factory, owned by a key proponent of Kiev’s greater integration with the EU. Moscow has also demanded payment of an overdue €640 million ($861 million) gas bill, amid a long-standing dispute with Kiev over the price it charges for fuel, raising the spectre of the kind of “gas war” that affected the transit of Russian gas supplies through Ukraine to the EU in 2006 and 2009. “We understand there would be possible negative effects of signing the agreement with the EU,” Ukraine’s deputy foreign minister, Andriy Olefirov, told The Irish Times. “But we are equals (with Russia) and having support from the EU will help us on many issues, like getting a fair price for gas.” “The Roshen issue, gas prices and possible shortages are all negative. But after the Lithuania summit we will see positive things – the EU agreement will also help us get a fair deal from the International Monetary Fund, and the EU has €610 million ($821 million) in the bank waiting for us.” Analysts say Ukraine may need more than €10 billion ($14 billion) in emergency funding from the IMF, and agreement between Kiev and the EU may help overcome an impasse over the conditions attached to the deal. From Russia with love Russia has offered its own inducements to Kiev to reject the EU, suggesting that it could get a discount on its gas price and funding – with few strings attached – from Moscow. As the days slip by, Ms Tymoshenko remains in jail, the likelihood of an EU agreement at the summit in Lithuania diminishes, and Ukraine looks more likely to remain firmly in Russia’s orbit. Mr Yanukovich has met Mr Putin twice in the last fortnight. Details of what they discussed were not revealed, but prime minister Mykola Azarov assured Ukraine that “the president and government are doing everything they can to restore normal trade and economic relations” with Russia.

Russia Waits As Ukraine Baulks At Terms Of EU Deal

KIEV, Ukraine -- With Ukraine’s continuing failure to release former prime minister Yulia Tymoshenko from jail comes a growing impression that president Viktor Yanukovich and his allies have decided it is better to deal with the devil you know – preferring to rebuild strained ties with old ally Russia rather than enter into historic agreements with the European Union. Parliament in Kiev was deadlocked again yesterday over what to do about Ms Tymoshenko, whom the EU sees as the victim of political persecution by courts loyal to Mr Yanukovich. If she is not freed before a major EU summit in Lithuania on November 28th, Ukraine will not be offered landmark political and trade deals that would weaken Moscow’s centuries-old grip on the country and align its future with the West. Feared rival Yanukovych, her most popular rival, who has vowed to topple him and investigate the allegedly ill-gotten gains of his supporters and his own family. He may see it as too risky to release her ahead of a presidential election in 2015. But if he is to abandon – or pause on – Ukraine’s European path, Yanukovich must quickly repair relations with Moscow, which have been damaged by his flirtation with Brussels. From President Vladimir Putin down, Russian officials have made it clear that if Ukraine signs the deals with the EU this month, nothing will ever be the same between them again. “That’s why we warn in advance, we say: listen, we understand everything. This is your choice, do it. But keep in mind that we would have to somehow protect our market, to introduce protective mechanisms,” Mr Putin said recently. Sergei Glazyev, Putin’s economic adviser, was more blunt: “We have no idea why Ukraine is signing this agreement . . . It will cut the roots of our economic co-operation.” On another occasion, he predicted that Ukraine’s loss of business with its main trading partner would be disastrous for the country. “Who’ll pay for Ukraine’s default, which will be inevitable?” he asked. In the last few months, Russia temporarily imposed new checks on its border with Ukraine, causing huge delays for road traffic, and banned the import of chocolate from the Roshen factory, owned by a key proponent of Kiev’s greater integration with the EU. Moscow has also demanded payment of an overdue €640 million ($861 million) gas bill, amid a long-standing dispute with Kiev over the price it charges for fuel, raising the spectre of the kind of “gas war” that affected the transit of Russian gas supplies through Ukraine to the EU in 2006 and 2009. “We understand there would be possible negative effects of signing the agreement with the EU,” Ukraine’s deputy foreign minister, Andriy Olefirov, told The Irish Times. “But we are equals (with Russia) and having support from the EU will help us on many issues, like getting a fair price for gas.” “The Roshen issue, gas prices and possible shortages are all negative. But after the Lithuania summit we will see positive things – the EU agreement will also help us get a fair deal from the International Monetary Fund, and the EU has €610 million ($821 million) in the bank waiting for us.” Analysts say Ukraine may need more than €10 billion ($14 billion) in emergency funding from the IMF, and agreement between Kiev and the EU may help overcome an impasse over the conditions attached to the deal. From Russia with love Russia has offered its own inducements to Kiev to reject the EU, suggesting that it could get a discount on its gas price and funding – with few strings attached – from Moscow. As the days slip by, Ms Tymoshenko remains in jail, the likelihood of an EU agreement at the summit in Lithuania diminishes, and Ukraine looks more likely to remain firmly in Russia’s orbit. Mr Yanukovich has met Mr Putin twice in the last fortnight. Details of what they discussed were not revealed, but prime minister Mykola Azarov assured Ukraine that “the president and government are doing everything they can to restore normal trade and economic relations” with Russia.

Kiev Testing ‘Pause’ In EU Integration

KIEV, Ukraine -- The political situation in Ukraine has been heating up as the European Union’s November 28–29 Eastern Partnership summit in Vilnius approaches. Kiev is preparing to sign an Association Agreement (AA) with the EU at Vilnius, but it is not yet certain whether the signing will go forward. Reaching this agreement could be a blow to Russian President Vladimir Putin’s “Eurasianist” integration policy and eventually challenge the current Russian political model. Consequently, Moscow has been applying substantial economic pressure on Kiev to turn the tide in Russia’s favor. President Viktor Yanukovych made a hasty working visit to Moscow on November 9, which his press office pre-announced as motivated by the need to discuss “trade and economic relations with Russia on the eve of the Vilnius Summit.” Earlier on October 27, Yanukovych met with Putin in Sochi. Both visits received virtually no media coverage, which led one of Ukraine’s opposition leaders, Arseniy Yatseniuk, to sharply react on November 11: “If this is about secret negotiations with the president of another state, then this is a direct cause for impeachment […] because it is about state treason”. Apparently, during the Sochi meeting, President Putin presented his Ukrainian counterpart with some “carrots.” The director of the Institute of Ukrainian Policy, Kost Bondarenko, told Jamestown on November 11 that Putin’s proposals included a $15 billion financing program for Ukraine, reduced natural gas prices, and promises to continue cooperation on joint projects in nuclear energy and technology as well as the manufacturing sectors. Subsequently, the Russian proposal to launch “multi-billion dollar joint projects with Ukraine aimed at diversifying the country’s economy if Kiev fails to sign an EU association agreement” were repeated by presidential advisor Sergei Glazyev. According to Bondarenko, the November 9 presidential summit in Moscow was, therefore, designed to discuss Russian-Ukrainian cooperation as well as Russian guarantees and various scenarios for the evolution of bilateral relations based on whether Kiev does or does not sign the AA with the EU, or whether the agreement is postponed until 2014. Furthermore, Bondarenko wrote on November 12 that, apparently, in an effort to appear more accommodating, Russia has lifted its insistence on Kiev joining the Customs Union. Sentiments for resolving the trade issues with Russia have been on the rise in Ukraine recently. For instance, on November 11, Ukrainian Prime Minister Mykola Azarov told the Ukrainian TV channel Inter, “It is not simply that we ‘do not want’ confrontation [with Russia], but that we will ‘never allow’ it… There will be no enmity between Russia and Ukraine, at least while our Government and our President are at the helm”. Furthermore, on that same day, the heads of Ukraine’s pro-government trade union federation (FPU) and industrialists association (USPP) requested that President Yanukovych meet with them as soon as possible to discuss the worsening of trade with Russia. The USPP specifically mentioned the economic hardships of railroad car building companies caused by Russia’s refusal to certify Ukraine’s production. Official statistics show that Ukraine’s railroad equipment exports fell 35 percent year-on-year in August 2013, where Russia was a key export market. At a meeting with the USPP on November 12, parliamentary deputy Valentyn Landyk asked the president to “postpone the [EU Association Agreement] signature by one year”. Meanwhile, President Yanukovych characterized Kiev’s European integration efforts as “pragmatic”. Yet, despite such mixed signals toward signing the AA, Yanukovych’s government appears to be more steadfast in developing broader cooperation with the West, including in the security and defense spheres with the EU and the North Atlantic Treaty Organization (NATO) — much to Russia’s irritation. Ukrainian marines based in Crimea recently successfully participated in the NATO Steadfast Jazz 2013 exercise, while the military is also preparing to participate in a multi-national Lithuanian-Polish-Ukrainian brigade as well as the proposed Visegrad Four + Ukraine EU Battlegroup. Kiev has also been proactive in easing energy dependence from Russia and tries to seek US and Chinese financial support to address Ukraine’s fiscal deficit. There seems to be little such pragmatism from the Russian side, however. In fact, Kremlin advisor Glazyev challenged European liberal values as running counter to the Russian elite’s “[Christian] Orthodoxy” and characterized the Ukrainian leaders’ European choice as “in essence, anti-Christian”. Moscow clearly would like Ukraine to abandon its role as a “political transit state” and finally choose between East and West. The Russian ambassador to the EU, Vladimir Chizov, told the Russian International Affairs Council on November 12: “Both Moscow and Brussels are sending a certain signal not only to Kiev, but also to some other so-called focus states of the Eastern Partnership, so that, in practical terms, the time of comfortably sitting between the two chairs is coming to an end”. Nevertheless, the main formal obstacle preventing the European Union from agreeing to sign the Association Agreement with Ukraine remains President Yanukovych’s unwillingness to release from prison the former prime minister and opposition leader Yulia Tymoshenko. The government needs to release Tymoshenko to demonstrate to Brussels that Ukraine is effectively addressing the issue of “selective justice”. On Wednesday (November 13), the Ukrainian parliament failed to pass a bill to allow Tymoshenko to leave prison for medical treatment in Germany. The Ukrainian authorities likely reason that while the benefits stemming from signing the AA will appear only in the long term, a shrewd politician like Yulia Tymoshenko might use Ukraine’s current economic downturn and Russian pressure on Kiev as campaign issues with which to attack Yanukovych in the upcoming spring 2015 presidential elections. This line of argument, however, rests on the assumptions that Vladimir Putin’s promises and threats are credible, and that the West’s policy on Ukraine is immutable. In fact, the EU might still consider lifting its “red line” on Tymoshenko and instead pledge to support Ukraine and sign the Association Agreement at the Vilnius Summit—while at the same time applying conditionality to Ukraine’s further development and democratization efforts. But the continuing lack of consensus among EU member states, coupled with the Ukrainian authorities’ record of insufficient cooperation in Tymoshenko’s case, somewhat tamper the likelihood of such an outcome. Nonetheless, for now, the prospects that the Ukraine-EU Association Agreement will be signed at the end of the month still remain relatively high.

Will Ukraine Go West, Or Stay East? Russia Fights Hard To Keep It In Its Orbit

MOSCOW, Russia -- President Putin’s advisor on economic integration warns Ukraine a move to the European Union would be “economic suicide.” A close friend of Russia’s president floods Ukraine’s capital with billboards warning EU association is a ticket to gay marriage. From steel to chocolates, Ukrainian products are held up at the border with Russia, Ukraine’s largest trading partner. The Kremlin has woken up to the fact that Ukraine, seen for centuries as a cradle of Russian culture and religion, may be on the verge of taking a decisive step out of Moscow’s orbit. At stake in this increasingly tense East-West tug-of-war, is a nation the size of France with 46 million people, nearly one third the population of Russia. Maxim Trudolyubov, editorial page editor of Moscow’s Vedemosti newspaper, warns the Kremlin will take reprisals if Ukraine signs an agreement of association with the European Union at a November 28-29 summit meeting in Vilnius, Lithuania. “On the face of it, it looks like the Kremlin will be very tough on Ukraine, and they can do a lot of things, they can do terrible things,” said Trudolyubov, whose newspaper is politically independent. “But, on the other hand, from the long perspective, of course, it is not in the Kremlin’s interest to harm Ukraine in any serious way.” At the Vilnius meeting, four former Soviet republics were expected to sign or initial agreements with the European Union. One, Armenia, folded in face of heavy Russian pressure. It agreed to join the Eurasian Economic Union, the rival trade group administered by Moscow. The other three - Ukraine, Moldova and Georgia - are on track, for now. The big prize The big prize is Ukraine, the second most populous former Soviet republic, after Russia. Pro-Kremlin analysts charge that “Polish imperialism” is pushing the European Union to admit Ukraine. They charge Washington is using the European Union to drive a wedge between Russia and its historic Slavic brother, Ukraine. Sergei Mikhailov, an analyst at the Russian Institute of Strategic Studies, warns the European Union is too broke to give Ukraine and Moldova the kind of infrastructure support doled out in earlier expansions. “Bulgaria and Romania are two countries that show the risks,” he said here. Russia’s pressure is taking its toll. Ukraine’s parliament has missed three deadlines to pass laws required by the European Union. The fight is expected to go right down to the wire, the day the meeting opens in Lithuania. Strong popular support But public opinion and Ukraine’s political calendar may be on the side of Ukraine choosing Europe. In a poll last month, 45 percent of Ukrainians favored the association agreement with the European Union. This is three times greater than the 14 percent who wanted to join the Moscow-led economic bloc. Dmitri Trenin, director of the Moscow Carnegie Center, sees Ukraine and Moldova’s move to integrate with Europe as a natural, positive evolution. “This will be an important stimulus to the modernization, not just of their economies, or political and legal systems, but also of societies,” he said in Moscow. “So I see it as hugely important and, on balance, very positive.” In 16 months, Ukrainians vote for president. With polls indicating growing popular support for joining Europe, analysts say President Viktor Yanukovych will win reelection only if he signs the European accession agreement. Indeed, Yanukovych seems to be preparing alternatives to weather economic blasts from Russia. This year, China is to become Ukraine’s second largest trading partner. Last week, Ukraine suspended imports of Russian gas until the end of this year. This is possible because of warm weather, an expanded gas storage system, and pipeline changes that allow Ukraine to import gas from Europe. In Moscow, Sergei Mikhailov compares the tension between Russia and Ukraine to the tension between two candidates in days before a close election. He says much of the tension is psychological. If a deal is signed in Lithuania, Russia and Ukraine will adjust to the new reality. Vygaudas Usackas is a Lithuanian living in Moscow. He is the E.U. ambassador here and says the deal could benefit Russia: “It will also have, I hope, a strong impact towards Russia, which is the most immediate and closest neighbor of Ukraine, benefiting from that pathway towards European values, governance, accountability and economic diversity of the systems we all embrace.” The coming days will tell: whether Ukraine stays East, or goes West.

Press Says Ukraine Torn Between EU And Russia

KIEV, Ukraine -- Newspapers believe Ukraine is playing for high stakes with Russia and the EU, after MPs failed to agree on a bill that would allow jailed opposition leader Yulia Tymoshenko to leave the country. Some liken the country to a lover torn between two suitors - the EU, which has made Ms Tymoshenko's release a condition for a key association agreement, and Russia, which wants Ukraine to join its own customs union. EU monitors now say Ukraine must pass laws meeting EU conditions by next Tuesday, or the deal will not be signed at a summit in two weeks' time. 'Risky game' Papers in Ukraine have mixed views on the chances of an agreement with the EU, as well as on its desirability. The tabloid Vesti says that in Ukraine "sceptical sentiments were growing yesterday regarding the prospects for signing the association agreement with the EU". Columnist Oles Buzyna goes further in the daily Segodnya. "Today it became finally clear to me that Ukraine's infamous association with the EU has kicked the bucket," he says. The columnist welcomes this, accusing the EU of being "maliciously willing to do away with Ukraine and what remains of its industry". However, the daily Den believes Ukraine "will lose out" if the agreement is not signed. "In the event of failure, everybody - the Ukrainian authorities, opposition and the European side - will be to blame," it says. The tabloid Segodnya quotes an aide to President Viktor Yanukovych, Dmytro Vydrin, as saying the agreement "will be signed anyway because there is a political will on the part of Euro-MPs and bureaucrats". Meanwhile the pro-opposition daily Ukrayina Moloda believes Mr Yanukovych "has not fully abandoned the EU association as yet", but is playing "a risky game" in a bid to extract as many concessions as possible from both Brussels and Moscow. 'Trust' at stake Russian newspapers see little chance of the EU-Ukraine agreement still going ahead. Under the headline "Ukraine in no hurry", the Vedomosti business daily says the probability of signing the association agreement has plummeted from 90% just a week ago to under 50% after the Ukrainian president visited Moscow over the weekend. Novyye Izvestiya agrees that "Ukraine is well on the way to scuppering the signing of the association agreement with the European Union". It notes that "the authorities have started saying that the country does not need the association with the EU at all". Moskovskiy Komsomolets suggests that the Ukrainian authorities have deliberately "disrupted" the passing of European integration bills. However, it quotes Global Strategies Institute director Vadim Karasev as saying that the president has "not yet made a final decision". The business daily Kommersant quotes pundits as warning that, as Mr Yanukovych continues to "manoeuvre" between the EU and Russia, he "may lose the trust of both". 'Giddy fiancee' The Polish daily Rzeczpospolita offers an explanation for Ukraine's perceived reluctance to resolve the issue of Ms Tymoshenko's fate. "Experts say that the ruling Party of Regions and President Viktor Yanukovych are scared by the former prime minister's ability to influence the presidential election campaign in 2015," the paper says. Germany's Frankfurter Allgemeine Zeitung believes that, "like a bride between two cavaliers", the Ukrainian president "is trying to play off Moscow and Brussels against each other". In this situation, the paper urges the EU to stay firm. "Europe must not allow an association with Ukraine for as long as Tymoshenko is in prison," the paper says. Under the headline "Ukraine moves away from deal with EU", France's Le Figaro Magazine feels that "there is a strong wind in Kiev blowing eastwards". "Like a giddy fiancee who has been pretending for months she was about to announce her prompt marriage with Europe, Ukraine is now going back on her promise, deciding instead to flirt with Russia, a protective neighbour who does everything it can to sabotage this union," the magazine says.

14 Ukraine Reporters Quit Over Censorship Concerns

KIEV, Ukraine -- More than one-half of the editorial staff at the Ukrainian edition of Forbes has quit to protest what they say is censorship imposed by the new management. Senior editor Boris Davidenko said Wednesday that he and 13 other journalists resigned after the new chief editor rejected a previously approved project to investigate a top government official, First Deputy Prime Minister Serhiy Arbuzov. Arbuzov, an ally of Ukraine's president, is believed to have ties to the magazine's new owner, the young millionaire Serhiy Kurchenko. Davidenko said the journalists were told the magazine was changing its coverage of a certain "important group of people." The chief editor, Mikhail Kotov, denied the accusations of censorship, saying the journalists were simply biased against the new owner.

Ukraine's 'Stalling' On EU Trade Pact Seen As Victory For Vladimir Putin

KIEV, Ukraine -- Kiev's failure to legislate for release of Yulia Tymoshenko, a key condition of Brussels deal, enhances Moscow's hold on Ukraine. Europe's hopes of besting Vladimir Putin and luring Ukraine out of Moscow's orbit through free trade and the prospect of EU membership suffered a setback on Wednesday when the parliament in Kiev balked at a key decision intended to push the country westwards. The parliament shelved legislation that would have released the former prime minister, Yulia Tymoshenko, from prison to go to Germany for medical treatment. The failure to act in Kiev was seen as a stalling tactic by the president, Viktor Yanukovych, and suggested a points victory for the Kremlin in its campaign to retain influence in the former Soviet territories between Russia and the EU. An EU summit at the end of the month in Lithuania is to decide whether to put Ukraine on the path to the EU through the signing of a free-trade pact and what is known as an "association agreement", a first step towards opening EU membership negotiations. In the ferocious tussle between Moscow and Brussels, Putin scored a significant victory in September when Armenia performed an abrupt volte-face, ditched years of negotiations with the EU, and announced it was joining a Russia-led customs union instead. Moscow is deploying the weapons of trade wars and gas supplies to coerce the former Soviet republics to shun Europe in favour of closer ties with Russia in what it appears to view as a zero-sum game. Ukraine, with a population of 46 million and the key transit territory for Russian gas supplies to Europe, is the big prize in this contest. The gloves appear to be coming off only two weeks before the crucial summit in Vilnius, the Lithuanian capital. The Yanukovych administration appeared to be engaged in brinkmanship, Moscow seemed satisfied, and Brussels despondent about developments this week. Pat Cox of Ireland and Aleksander Kwasniewski of Poland, both Europe's mediators in Ukraine, were due to report on their mission to the European parliament on Wednesday evening. All the signs were they would deliver a verdict of mission not yet accomplished. Germany has made Tymoshenko's release a condition for signing the EU pact with Ukraine. Lithuania, currently chairing the EU and a former Soviet territory, has argued strongly against tying such a strategic decision to the fate of one person. Poland and Sweden have also been strong advocates of getting the deal done with Ukraine. The main criterion Yanukovych has to meet for the European pact is an end to "selective justice", or the manipulation of the judiciary for political ends. This would apply to the Tymoshenko case; she was jailed for seven years in 2011 for what are widely seen as political reasons. But the clouds darkened on Monday when the Ukrainian authorities also detained Tymoshenko's chief lawyer for questioning about alleged domestic violence. Yanukovych also went to Moscow at the weekend for secret talks with Putin. Cox and Kwasniewski are to deliver a report on their 18-month mission, which will be discussed by EU foreign ministers next Monday before the summit in Lithuania. Diplomats in Brussels said the chances were receding of striking a deal in Vilnius, but that the brinkmanship could continue until the last minute.